In terms of overall
sentiment, the Occupier
Sentiment Index (OSI) increased to 23 in Q2 from
14 in Q1. The Investor Sentiment Index (ISI) increased
modestly from 19 in Q1 to 23 in Q2.

As for rental
demand across sectors, demand for retail space
increased in the occupier market since Q2 2013, with landlords offering rent
free periods. Survey respondents continued to report an
increase in the supply of office and retail properties available to let at a more modest pace in Q2, landlord incentives remained
unchanged for these two sectors.

In the investment market, headline
investor demand remains robust in office
and industrial properties, driven by the increased foreign investment interest
in Hong Kong Office space for the eighth
consecutive quarter. Respondents reported that
the demand for retail properties increased for the first time since Q4 2012,
driven by domestic investors.

"Occupier demand increased from across
all market segments in Q2, led by demand for office space. Notably, the outlook
for rents over the next year was similarly bullish -- respondents expect the
biggest increase in rents (in net balance terms) since Q3 of 2011," said RICS Chartered Surveyor
Mr Frank F Wong MRICS. "The capital
values in the overall market are still rising, indicating sustained positive
momentum in the investment market".

The outlook for rents was bullish, with the headline
rents expected to increase 4.4per centover the next year.Respondents see capital values increasing
over the next three and 12 months across all segments of the market.

The RICS Hong Kong Commercial Property
Monitor is a quarterly sentiment index tracking trends in the commercial property
market. It is a leading indicator for global investment and occupier markets. The
full report is available at www.rics.org/economics.

About RICS

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Our name promises the consistent delivery of standards -- bringing confidence to
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